Question

Scientists have created a new grass seed that stops grass growth at a specific length, eliminating the need to mow the lawn. The price of this seed is high, but many consumers still want to use it. As a result, several different producers supply a large amount of this seed to consumers. In order to attract consumers to their product, some producers lower their prices and supply fewer bags of seeds.
What is the best description of the grass seed that is described in this scenario?
a good with a low price
a good with a high price
a good with an inelastic supply
a good with an elastic supply

Answer 1

Answer:

The correct answer is: a good with an elastic supply.

Explanation:

In the modern microeconomics, price elasticity measures the correlation between variation in demand and variation in price. If the market is elastic, a small change in price results in a significant change in sales volume. If the market is inelastic, a significant change in price results in a small change in sales volume. Therefore, the pricing strategy will be different depending on whether the market is elastic or inelastic:

If the market is elastic, the increase in profits implies a decrease in the price.

If the market is inelastic, an increase in profits implies an increase in price.

Answer 2

Answer:

competition

elastic

Explanation:

Scientists have created a grass seed that stops grass growth at a specific length, eliminating the need to mow the lawn. The price of this seed is high, but many consumers still want to buy it. As a result, several different producers supply a large amount of this seed to sell to consumers. To attract consumers, some producers lower their prices and supply fewer bags of seeds.

Use the drop-down menu to complete each statement.

In the scenario to the left, competition is the main factor affecting the price of the seeds.

This specific grass seed is a good with an elastic supply.